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Former hedge fund manager Jeremy Stone is suing Royal Bank of Scotland (RBS.L) over claims the bank ignored evidence of a £300 million ‘Ponzi scheme’.

According to the Sunday Times, Stone, a former portfolio manager at Marble Bar Asset Management, has accused RBS subsidiary NatWest and one of its bankers, Paul Aplin, of ‘turning a blind eye’ to a fraud carried out by two businessmen, Jolan Saunders and Michael Stubel.

The complaint was filed in London in April. Court documents state Stone has accused NatWest and Aspin of negligence, dishonest assistance, deceit and conspiracy. He has claimed he and his family lost £19.3 million between 2009 and 2010 and has demanded £24 million in damages.

According to the court papers, Stone was approached by Saunders in June 2009 about setting up a joint venture to supply electrical goods to hotels.

Stone subsequently provided millions of pounds to firms related to Saunders, including Saunders Electrical Wholesalers and Zac Fashions. It later transpired the firms had minimal revenue.

NatWest provided Saunders companies with business accounts which are alleged to have taken in around £300 million.

Stone’s lawyers, quoted in the Sunday Times, said: ‘[Saunders] was using each….investors’ money to pay back loan interest allegedly owed to the other…investors, the very definition of a Ponzi scheme.’

In response RBS said: ‘These claims have been thoroughly investigated and we believe they have no merit. The bank will defend itself vigorously.’

As an RBS shareholder, the news on this company just keeps getting worse. Professional Banker?

Also, the recent 1:10 shares revaluation, feels like the bank telling share holders what the shares should be worth, when they are actually only worth the previous value, based on RBS performance & past practice/s.